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USDMXN Forecast – November-9-2023

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FxNews – In today’s comprehensive USDMXN forecast (US dollar and the Mexican Peso), we will first scrutinize the current economic conditions in Mexico. Following that, we will meticulously delve into the details of the technical analysis pertaining to the USDMXN pair.

A Closer Look at Mexico’s Inflation Rate

In October 2023, Mexico’s yearly inflation rate experienced a slight decrease, dropping to 4.38% from 4.45% in the preceding month. This was marginally lower than the market forecast of 4.28%. Remarkably, this represents the ninth straight month of diminishing inflation, bringing the rate to its lowest point since February 2021.

A variety of sectors saw a slowdown in inflation. These include food & non-alcoholic beverages (down to 4.89% from 5.90% in September), alcoholic beverages (5.85% from 6.14%), clothing & footwear (4.01% from 4.50%), and furnishings, household equipment & routine household maintenance (3.63% from 3.96%). Additionally, transportation (3.71% from 3.93%), recreation & culture (2.72% from 2.87%), restaurants & hotels (7.83% from 8.55%), and miscellaneous goods & services (7.54% from 7.95%) also experienced a decrease in inflation.

However, the housing & utilities sector saw a rebound in prices (1.01% from -0.30%), primarily due to a 2.57% increase in energy prices and tariffs following the conclusion of the subsidy that supported the summer electricity tariff program in 18 cities. On a monthly basis, the Consumer Price Index (CPI) saw a rise of 0.38% in October, following a 0.44% increase in September.

Economic Implications

A decrease in inflation is generally seen as a positive sign for the economy. It indicates stability and suggests that the purchasing power of consumers is not being eroded by rising prices. However, it’s important to monitor these trends closely as prolonged low inflation can also signal a sluggish economy. In this case, the easing inflation coupled with the rebound in housing and utility prices suggests a balanced economic scenario.

USDMXN Forecast

The USDMXN downtrend appears to be easing at the 61.8% Fibonacci retracement level. This level coincides with the Ichimoku cloud, making this resistance level particularly robust. Moreover, the Relative Strength Index (RSI) indicator is showing divergence, which could signal a range market or even a trend reversal.

USDMXN Forecast - November-9-2023

USDMXN Forecast – Daily Chart

For a more in-depth understanding and to identify potential triggers, we’ve zoomed into the USDMXN 4H chart. Currently, the pair is trading within a narrow range, as depicted by the blue box on the 4-hour chart. The pivot point is acting as resistance. If the price holds below this level, we anticipate another fall, targeting S1 (16.998).

USDMXN Forecast

USDMXN Forecast – 4H Chart

Conversely, if the USDMXN price can stabilize above the pivot, we could see some upward momentum towards R1 (17.8 resistance).

Our analysts at FxNews recommend closely monitoring these levels and looking for candlestick patterns to make informed decisions with minimal risk. Stay updated with our forex forecasts for the latest market insights.

  • 9 November 2023
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